MARKET REPORT

A stock market bloodbath saw £37bn wiped off the FTSE 100 yesterday as a host of weak economic data pummelled shares.

London’s blue chip index closed down 147.72 points, or 2.01%, at 7,207.59 as problems in the eurozone, the unresolved US-China trade dispute and Brexit uncertainty conspired to spook traders.

Eurozone PMI data came in at the lowest level since 2014 and the manufacturing sectors in Germany and France, the two largest economies in Europe, experienced contraction.

“The updates underlined how fragile the eurozone is, and traders are worried about how the region would cope in the event of a no-deal Brexit,” said David Madden, market analyst at CMC.

Among a sea of red stocks,

Sainsbury’s managed to eke out a small gain after the supermarket, along with Asda, offered to sell up to 150 stores as part of efforts to address competition concerns over their £12bn merger.

The supermarkets also described the Competition and Markets Authority’s (CMA) provisional findings into the merger, which warned the deal could be blocked unless they sell off significant stores or even one of the brands, as “prohibition in all but name”.

Sainsbury’s shares were up 0.2p at 236.8p at the close. In the lower tiers, Debenhams shares crumbled over 45%, or 1.31p, to end at 1.59p after a day of high drama involving Mike Ashley’s Sports Direct.

The tracksuit tycoon ramped up his efforts to gain control of Debenhams as the department store chain puts in motion plans to secure £200m in new funding.

Crucially, the retailer also announced it will pursue a restructuring plan in a move which could wipe out existing shareholders, including the Sports Direct founder.

For its part, Sports Direct said it had offered to buy Debenhams’ Danish business, Magasin du Nord, for £100 million. The deal would see Mr Ashley become chief executive of Debenhams.

Sterling was up 0.75% versus the US dollar at 1.320 at the London market close, while the British currency rose 1.5% against the euro to hit 1.169.

The biggest risers on the FTSE 100 were Pearson up 14p at 849.2p, Next up 64p at 5,380p, Kingfisher up 2p at 228.6p and Auto Trader up 2.2p at 512.2p.

The biggest fallers on the FTSE 100 were NMC Health down 156p at 2,424p, Standard Life down 27.8p at 578.6p, Smurfit Kappa down 100p at 2,186p and DS Smith down 14.9p at 342.3p.